Designing processes for products and services. There are literally thousands of processes that routinely take place within large organizations. Many of these processes could stand to be improved, so as to maximize their efficiency and effectiveness. These improvements would lessen operating costs, make it easier to forecast revenues, and decrease the degree of variability in outcomes. While this sounds simple, designing a process that is cost effective, sustainable, reliable, and integrates quality into the finished product or service is not an easy undertaking.
There are many hard and soft factors to consider. Legal factors such as hiring laws are considered hard factors and those are obvious. On the other hand, factors such as culture and ethics would fall under soft factors, but they cannot be ignored. If a company’s processes offend a culture or they are seen as unethical then this can result in bad press and other negative connotations that are undesirable. Also, when designing a process you typically do not have 100% of the data needed, or the data has variance.
Take forecasted demand for example. There is a margin of error around the forecast, which is nothing more than an estimate of future demand, and this margin of error has to be considered in the process design. You do not want to design your process to handle only the forecasted demand and not have any slack in case the forecast is lower than actual demand, for if you do then potential profits are lost. In this chapter you will get the opportunity to develop process design skills.
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Unit Learning Outcomes
- Document the requirements for an operational product / service plan for an organization. (CLO 2, 4, 5, and 7)
- Analyze the risks to an organization resulting from a poorly formulated product / service plan. (CLO 2 and 7)
- Examine considerations for sustainability of a product /service plan. (CLO 2, 3, and 7)
- Prepare an operational product / service plan emphasizing efficiency and suggested changes to improve operational outcomes. (CLO 1, 2, 3, 4, 5, 6, and 7)
End of Chapter Problems (60 points): Answer the following end of chapter problems from the textbook:
Chapter 4 – problems 3 and 6 (page 172, 10 points each).
View the following example video before working the problems:
Chapter 4 Supplement – problems 1, 3, 6, and 11 (pages 184-185, 10 points each).